Cattle Current Daily—Jan. 11, 2022

Cattle Current Daily—Jan. 11, 2022

Inflation jitters weighed on most commodities and outside markets Monday. Cattle futures were also pressured by recently slower packer processing and fears of back-logging cattle.

Live Cattle futures closed an average 86¢ lower (17¢ lower at the back to $1.47 lower toward the front), amid heavy trade .

Feeder Cattle futures closed an average 81¢ lower (5¢ lower at the back to $1.42 lower).

Negotiated cash fed cattle ranged from mostly inactive on very light demand to a standstill through Monday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service.

Last week, live prices were steady in the Texas Panhandle at $138/cwt., but steady to $2 lower at $136-$138 in Kansas and at $138-$140 in Nebraska and the western Corn Belt. Dressed trade was also steady to $2 lower at $220.

The five-area direct average steer price was $1.18 lower on a live basis last week at $138.41/cwt. The average price in the beef was 91¢ lower at $219.98.

Choice Boxed beef cutout value was $4.22 higher Monday afternoon at $276.04/cwt. Select was $5.40 higher at $266.50/cwt.

As for grains, Soybean futures softened to start the week with rains forecast for South America.

Soybean futures closed 21¢ to 26¢ lower through Nov ‘22 then 14¢ to 19¢ lower through Sep ’23 and mostly 4¢ lower across the rest of the board.

Corn futures closed fractionally mixed to 7¢ lower through May ’23 and then mostly 4¢ to 5¢ higher.

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Major U.S. financial indices continued to sag Monday, beneath the weight of concerns surrounding higher forthcoming interest rates. However, they clawed back some earlier-session losses by the end of the trading day.

The Dow Jones Industrial Average closed 162 points lower. The S&P 500 closed 6 points lower. The NASDAQ was up 6 points.

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“Beef and cattle trade is projected to be generally supportive in 2022,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his latest weekly marketing comments. “Beef exports are forecast to pull back slightly in the coming year but lower imports are also forecast. After more than a year of extremely rapid growth, the China/Hong Kong market for U.S. beef was growing at a slower pace at the end of 2021, but continued growth is expected and could push China/Hong Kong above South Korea or possibly Japan in the foreseeable future.”

As mentioned in the last issue of Cattle Current, U.S. beef exports continued at a record pace through November in terms of both volume and value.

Beef exports to China/Hong Kong were on pace to exceed $2 billion in 2021. Through November, exports to the region nearly doubled from a year ago to 219,264 mt (up 98%) and increased 125% in value to $1.9 billion, according to the U.S. Meat Export Federation (USMEF). Direct exports to China, bolstered by greatly improved market access achieved in the U.S.-China Phase One Economic and Trade Agreement, increased more than 400% from a year ago to 172,257 mt, valued at $1.43 billion (up 502%).

However, Japan will finish 2021 as the leading volume destination for U.S. beef exports, but is in a neck-and-neck race with South Korea on export value, according to USMEF data.

For January through November, U.S. beef exports to Korea were record high at 258,552 mt valued at $2.17 billion – up 13% and 36% respectively. 

During the same period, exports to Japan were 6% above last year’s pace at 297,354 mt. Export value reached $2.16 billion, up 22% and exceeding $2 billion for the first time since 2018. Growth to Japan has been in the chilled beef category and in tongues, skirts and other variety meat.

“Beef by-products, which are mostly exported, had significantly higher value in 2021, averaging nearly 54% higher year over year,” Peel says. “By-product value increases were led by sharply higher tallow prices, both edible and inedible, (up 71% and 95%, respectively) and hide prices (up 62% year over year). Prices were also higher for liver, tongue, tripe and cheek meat. Weekly by-product values peaked in November and declined to the end of the year but were still 51% higher year over year in late December.”

2022-01-10T20:12:30-06:00

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